Preventive Vigilance

1. Preventive Vigilance Dynamic response to ever changing threat perception

2. CASH • Security of Post Office cash and valuables. • Prevent excess cash retention. Min/Max Bal. Review • Security during transmission and line-limits. • Pay Day precautions. • Physical counting of cash and use of Treasury Module. • ECB Memos. • Bank Reconciliation. • Fake cheque clearance.

3. STAMPS • Used-up stamps prevalent in large quantities. • Fake stamps keep coming to notice. • Bulk Mailers, Religious Institutions easy targets for pushing used-up/fake stamps. • Check at acceptance point can only be effective. • Proper records of bulk sale/posting necessary in treasury/BMCs.

4. FRANKING • Large pilferages noticed by commercial mailers. • Both customers and DOP found cheated. • Second office of posting to be monitored most carefully. • Check at acceptance point most effective. • Old machines/die to be destroyed. • Site visit / record check necessary.

5. MONEY ORDERS • Fake High Value MOs introduced into system. • Office copies of list intact, interpolations in second copy common modus operandi. • Unsuspecting receiving office pays out. • Fake stamps and seals used. • HVMO forms sent by fictitious service Regd. articles.

6. CASH CERTIFICATES FRAUDS • Encashment of lost/stolen CCs (without proper verification in transfer cases) [Guwahati GPO] • Use of lost/stolen CCs by forging No. & Series to avoid Negative List [Kanpur GPO] • Double/multiple discharge [Amlapuram HO, Raniganj HO] • Discharge of imaginary CCs [Raniganj HO] • Inflated amount of discharge shown [Raniganj HO] • Non-inclusion of sale in issue journal and non-credit of sale proceeds of genuine CCs [Teliabagh SO, Varanasi] • Pledging of lost/stolen/counterfeit CCs [Patna, Chandigarh, Gorakhpur] specially by contractors as security for contracts • Encashment of lost/stolen CCs through fraudulent name transfer

7. LAPSES NOTICED IN MAJOR CASH CERTIFICATES CASESPO LEVEL • Negative List not consulted • Proper verification procedure not followed • Payments exceeding Rs. 20000/- made in cash instead of by cheque • Local address of the investor is not verified in RBT cases • Payments are made without specific pay order of the competent authority • Non-maintenance of NC-12 & NC-12 (a) registers and its non-reconciliation with issue journals and money accounted for • Non/delayed submission of due returns to the PAO

8. LAPSES NOTICED IN MAJOR CASH CERTIFICATES CASESPO LEVEL • Returns to PAO without supporting vouchers – cases of will follow and other remarks • Returns to PAO without the signatures of the competent authority – under signature of APM instead of Postmaster • Proper upkeep of purchase applications not ensured – kept loose not in guard files and in proper security • Poor record maintenance – wanting / missing office copy of issue/discharge journals, stock register, guard files, invoice, indents etc. • Acceptance of Agents as witness • Non-conducting of internal branch inspection by the Chief / Sr./ Postmasters

9. LAPSES NOTICED IN MAJOR CASH CERTIFICATES CASESPAO LEVEL • Non/delayed opening of bags of returns received from HOs • Non-scrutiny / matching of supporting documents with due returns • Non-pairing of issue/discharge details even of representative samples • Non-detection of significant short/excess vouchers with returns • Non-detection of even imaginary / inflated discharges (even for periods paired) // double / multiple discharge even during the same month • Non-maintenance of S & I register • Not keeping watch over the timely receipt of due returns from HOs • Upkeep of records – records not available even during the period of preservation • Records destroyed after preservation period even without mandatory pairing/checking

10. LAPSES NOTICED IN MAJOR CASH CERTIFICATES CASESADMINISTRATIVE AND INSPECTORIAL LEVEL • Major frauds being detected on anonymous complaints – Collapse of regular supervisory / regulatory mechanism • Questionnaire during inspections/visits not followed • Tenure transfer instructions not followed scrupulously – extension given without examination of performance / previous service records • Table transfer norms not implemented in HOs • Regular posting of same group of officials in SB/CC related posts (cooling off period not followed) • No follow-up on due reports from POs to Divisional offices

11. LAPSES NOTICED IN MAJOR CASH CERTIFICATES CASESADMINISTRATIVE AND INSPECTORIAL LEVEL • Light punishments, not commensurate with loss/offence • Delay leading to retirement of main/subsidiary offenders • No review of such penalties / misplaced sympathy and compassion shown during review • Subsidiary and co-offenders not properly identified • Delay and hesitation in reporting cases to police • No proper follow-up action on findings of departmental investigation • Dormant status of DO/RO/CO Checking squads – all satisfactory reports with nil irregularity noticed – number and amount of frauds increasing

12. FEATURES NOTICED IN MAJOR SAVINGS BANK FRAUDS – BY DEPARTMENTAL OFFICIALS • Non/delayed-credit of deposits in government account by the counter PA • Bogus ATs inserted in the system • Issue of duplicate passbook without proper verification • Non-maintenance of stock register for passbooks • Exchange of passbooks between counters without acquittance • Fraudulent use of blank passbooks and post office stamps/seals • Access of unauthorized persons to post office records – unauthorized help taken by staff • Forged closure / premature closure of accounts by forging signatures of customers

13. FEATURES NOTICED IN MAJOR SAVINGS BANK FRAUDS – BY DEPARTMENTAL OFFICIALS • Forged withdrawal from accounts of customers by forging signatures • Double / multiple closure of accounts • Fraudulent collaboration with Agents leading to cheating of customers investing through agents • Routing of counter business through Agent – Fraudulent drawal and sharing of commission – a recent trend – commission is generated even in cases evidently of reinvestment • Manipulation of records/ledgers/computer database – inflating balance for fraudulent withdrawal • Slackness/arrear of work in SBCO • Payments exceeding Rs. 20000/- are made in cash instead of cheque

14. FEATURES NOTICED IN MAJOR SAVINGS BANK FRAUDS – BY AGENTS • Creating trust with customers then breaching the same – criminal breach of trust • Taking advantage of customers hurry and ignorance of procedures • Taking advantage of customers’ interest in part of the commission • Non-issue of preliminary receipts to customers • Retention of passbooks by the Agents • Getting blank / self / without endorsement cheques for investment – fraudulent diversion of the amount in their interest

15. FEATURES NOTICED IN MAJOR SAVINGS BANK FRAUDS – BY AGENTS • Managing blank / messenger signed withdrawal slips from customers – leading to premature fraudulent closure • Replacement of original papers (mainly account opening form) for opening of accounts with papers in their own handwriting to facilitate issue of duplicate and finally fraudulent closure • Access to post office records – allowed to make their own entry in passbooks as per their schedules of deposits – fabricated entry in passbooks misleading depositors • Easy availability of blank passbooks to the Agents leading to issue of false passbooks with altered amount to the depositors

16. Types of Frauds in Computerized Offices • Stamp prepaid • Supervisor password known to operators • Inclusion of article & MOs • Manipulation of reports • Violation of security instructions issued by Directorate

17. COMPUTER SECURITY GUIDELINES • Directorate Instructions 46-5/2004-Tech dtd. 21 July 2004 • Sharing of Password to be stopped • Password to be periodically changed • Confidential information to be stored on standalone system only • Unauthorized access to Servers/PCs to be stopped

18. During Maintenance • Maintenance or rectification of faults in the computer system should be carried out under proper and close supervision in case of maintenance of hardware by an external agency • Ensure that no data – file / program is copied and taken by the maintenance engineer. • Maintenance of software should be done by the users.

19. Bad hard disk should not be released even after it has been replaced by a new one. Such hard disks may be destroyed by following procedures as applicable to weeding out of classified files. • AMC – Repairs – Need to remove all data– wipe out the hard disk , so that deleted information can’t be reversed.

20. Case Study - I • Station Kacheguda HO • Committed by SBCO supervisor • SB LAN • Rs. 1,34,317.00 • Full amount recovered • Breach of password secrecy

21. Case Study - II • Anna Road HO • System Administrator involved • Sanchay Post • Changing of BAT through data entry module • Detected due to complaints and mismatching of LOT and vouchers.

22. Case Study - III • Worli Naka Post Office, Mumbai • Sanchaya Post • Data Entry Mode used – due to Cheque clearance. • Use of APM password • Detected due to union complaint

23. RMS OPERATIONS • Cases of abstraction/loss of articles • Trends in particular sections/sets • Rotation of staff, particularly those of doubtful integrity • Posting of periodicals in PSO

24. RMS OPERATIONS • Loss of CSD Bags, Postage Stamps etc. • Careless handling of accountable articles, Non tallying of registered abstracts, fix individual responsibility • Punishment for loss/abstraction

25. Suggestions for prevention • Training to Officers to conduct Technology inspections. • Regular monitoring of password security and sanctity. • Technology squad check on lines similar to vigilance squad check. • Technology Vigilance to be separated from technology implementation. • Data base warehousing at RO/CO. Databases of HPOs/Pos may be obtained once in 2-3 months and may be checked at Tech Cell of RO/CO. Use of analysis services of RDBMS should be done. • Need of Technology audit by professionals. • Making a Regional cadre for technology officials and system administrators.

26. Monitoring & Investigation • Effective monitoring of software usage, observance of password secrecy at Pos, and vigilant inspections of computerized offices will prevent frauds. • To investigate computer related frauds, we have to be innovative in our approach to ensure that the real culprit is brought to the book.

27. Thank You